China Singyes Solar wins major project in sun-rich Uzbekistan

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Shares of China Singyes Solar Technologies rose as much as 7.2 per cent on Thursday after the company unveiled its biggest overseas solar farm installation project win in the Central Asian nation of Uzbekistan.

The company has won a tender to design, build and operate a 100 mega-watt, US$147 million solar farm for state-owned utility firm Uzbekenergo in the former Soviet republic, which is situated in the ancient silk road economic belt where Beijing is pushing for closer economic ties.

“The contract shows that the group’s capabilities in the field of solar engineering, procurement and construction meet the international standards required by Uzbekenergo,” Singyes, which also installs curtain walls for buildings, said in a filing to Hong Kong’s exchange late on Wednesday.

“This also reinforces the group’s strategy to follow the ‘one belt, one road’ initiative as announced by the Chinese government,” the Zhuhai-based company said. Its shares closed Thursday 3.7 per cent higher at HK$3.61.

Singyes financial controller Jimmy Yu Chon-man said the firm expects to make a gross margin of around 28 per cent – matching that of its domestic projects – despite higher transportation and labour costs for solar panels expected to be exported from eastern China over thousands of kilometres via rails and roads to the land-locked nation.

The higher costs are expected to be offset by a roughly 40 per cent premium on the project’s capital expenditure per unit of capacity compared to Chinese projects, he told the South China Morning Post in an interview.

Execution of the Uzbekistan project is expected to start next April and continue over 12 months, he added.

The firm late last month said it had received 113MW of new solar farm engineering, procurement and construction (EPC) projects in southern China so far this year, which will be completed by the end of June next year.

This also reinforces the group’s strategy to follow the ‘one belt, one road’ initiative as announced by the Chinese government

China Singyes Solar Technologies statement

It completed 170MW of EPC solar projects in the first half of this year.

The new project, located in the Samarkand province in southeast Uzbekistan, will be primarily financed by the Asian Development Bank (ADB).

According to an ADB document on the project, over 89 per cent of Uzbekistan’s total power generation capacity of 12,600 MW is fired by fossil fuel, and the remainder by hydro power.

“Uzbekistan has among the highest energy and carbon intensities in the world, both over six times the world average, calling for drastic increases in energy efficiency and renewable energy to reduce greenhouse gas emissions,” ADB said.

Half of the nation’s fossil fuel power plant capacity is from facilities built before 1982, with only 10 per cent built after 1997.

This means most of the plants are less efficient and not environmentally friendly compared to modern ones.

On average, some 20 per cent of the nation’s generated power is lost through transmission compared to 6 per cent in mainland China, due partly to long distance grid transmission and smaller population density.

Solar power, usually consumed locally, can get help communities get around the power loss problem.

“While Uzbekistan is almost 100 per cent electrified, the demand-supply gap leaves many provinces,

including Samarkand, with intermittent power,” ADB said.

Uzbekistan plans to have at least 4,000MW of solar power capacity by 2031, accounting for around 21 per cent of its total generating capacity by then, it added.

According to a research paper by Uzbekistan’s scientific engineering and marketing research centre, the nation’s average number of hours of annual sunshine range between 2,800 and 3,050, making it a solar resource rich nation.